Rudy Giuliani agreed Wednesday to a deal that will see him fork over $100,000 in cash and earmark the profits from the future sale of two multimillion-dollar properties to satisfy outstanding administrative fees from his drawn-out bankruptcy case.
The agreement will see him avoid being forced to testify under oath about his murky finances after the federal judge who threw his case out earlier this month threatened to reverse his decision earlier this week. U.S. Bankruptcy Judge Sean Lane warned Giuliani that he and his creditors had until noon Wednesday to let the court know how they planned to settle his debt, which amounts to around $400,000.
The agreement, to which Lane still has to give the green light, was filed less than three hours before that deadline, according to the Associated Press.
The terms of the deal will see Giuliani transfer $100,000 to an escrow account controlled by his lawyers upfront. He will pay the rest of his tab with the proceeds from the sale of either his New York apartment, worth an estimated $5.6 million, or his Florida condominium, worth around $3.5 million.
The outstanding fees that the former New York City mayor owes are to a financial investigation firm hired by his creditors, who include two former Georgia election workers who won a $148 million defamation claim against him earlier this year. Those creditors said they’d signed off on the deal in a joint letter to Lane alongside Giuliani’s lawyers on Wednesday morning.
The firm, a Manhattan-based outfit called Global Data Risk, will place liens on both properties to ensure Giuliani makes good on his obligations. The company will not be allowed to seek foreclosure or take other actions related to the properties for six months after Lane signs off on the deal.
The former election workers, mother and daughter Ruby Freeman and Shaye Moss, are expected to sue Giuliani for the rest of their claim once the bankruptcy case is formally cleared out of the way. They had been prevented from seeking enforcement for as long as the case dragged on.
Lane moved to dismiss the case on July 12, excoriating Giuliani for his “uncooperative conduct,” accusing him of obfuscating his finances and ignoring court filing deadlines to block his creditors from collecting. A lawyer for Freeman and Moss told The New York Times shortly after that they were “pleased the court saw through Mr. Giuliani’s games and put a stop to his abuse of the bankruptcy process.”
Under the dismissal order, Giuliani was barred from filing for bankruptcy again for at least the next 12 months. He originally filed for Chapter 11 bankruptcy protections last December.
But Lane noted last Thursday that he hadn’t formally dismissed the case yet, and might consider reviving it should Giuliani continue to fail to pay his administrative expenses, “a necessary requirement under the law for dismissal.”
While Giuliani had whined that he didn’t have the funds necessary to settle his debt, Lane said, it was difficult to know whether that was true because of his lack of transparency. He invoked the specter of a hearing that would “inevitably include disclosure of documents and might include testimony under oath” from the former personal attorney to Donald Trump.
“Of course, this path might mirror in some ways the unsuccessful efforts at financial transparency that have plagued the case to date,” the judge remarked in his order.
A spokesperson for Giuliani did not immediately return a request for comment Wednesday night.
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